MD HB1298

Litigation financiers must obtain a license under the Maryland Consumer Loan Law (Title 11, Subtitle 2 or 3) before providing financing to plaintiffs in civil actions where repayment is contingent on case outcomes.

Litigation financing is reclassified as a loan subject to Maryland's Commercial Law consumer protection provisions, rather than treated as a separate investment product.

Parties receiving litigation financing must automatically disclose the financing contract to all other parties and insurers in the civil action within 30 days of entering or amending any agreement.

The existence, participants, and contents of litigation financing contracts become discoverable in civil cases, regardless of whether the action has formally commenced.

Effective October 1, 2026, with prospective application only to contracts entered after that date (except for licensing requirements which apply immediately).